August 2018 Monthly Outlook – Expanding the Horizon

Before I jump into this month’s outlook I want to share some exciting news about our staff at Directional Wealth Management.

Christian has recently earned the Behavioral Financial Advisor™  designation. The BFA™ designation integrates the concepts of traditional finance, psychology and neuroscience with the goal helping clients improve their emotional competency and decision-making behaviors as it relates to their personal financial situation.  This is so important as we are seeing more market volatility, political turmoil, increasing interest rates, and higher personal financial stress in general.

Colleen is studying for her Securities Industry Essentials (SIE) exam and her Series 6 license.  These will provide Colleen with the knowledge to perform critical functions in our operation. Richard is studying for his General Securities Representative (GSRE) exam/Series 7 license.  This is the first step towards becoming a fully licensed financial services practitioner.   All told, this will allow the staff to provide a higher level of services to you.  Please join me in supporting congratulating Christian and supporting Colleen and Richard in their studies.

Turning the outlook, July saw increased volatility across financial markets, with the S&P 500 moving 5.52% from low to high during the month, only to fade at the end due to poor results from Facebook.  Despite this, the S&P 500 gained 3.48% for July, the best month since January 2018.  Interest rates creeped higher as well during July with the US 10yr Treasury rising from 2.85% to 2.96%.

While the financial markets were impacted by the brewing trade/tariff battle in Washington and poor corporate earnings from some companies, the economy appears to be expanding it’s horizon.  For the 2nd quarter of 2018, the preliminary reading on US Gross Domestic Product (GDP) was 4.1%, the best reading since Q2 and Q3 of 2014.  Consumer spending, which accounts for roughly 70% of the economy, remained strong.  There was also an increase in exports, likely fueled by  manufacturers shipping goods ahead of the pending tariffs.  Inflation remains near the Federal Reserves stated target of 2%. Overall, the US economy continues to be solid with the potential for more growth on the horizon.


On the investment front, I still believe the equity market is in a good spot.  There is an interesting dichotomy going on.  A thoughtful analysis of the fundamentals says the market is going “up” but investor emotions and observations say “down.” Rest assured, if the market does head lower, I believe it is a normal temporary symptom of usual summer volatility. More importantly, I think it creates an opportunity to buy.

Let’s just look at earnings for a moment as we are in the throes of earnings season. Despite the gloom from Facebook’s disappointing reports which sank the stock as much as -20%, the overall earnings environment is great. According to FactSet’s Earnings Insight, 53% of the S&P 500 has reported Q2 2018 earnings thus far. 83% of those reported a positive surprise and 77% beat sales. If the number should remain there, it’ll be the highest on record for FactSet since they began tracking in 2008. The blended earnings growth rate is +21.3% which would be the second highest on record.


So, the yin/yang of solid fundamentals likely continues to battle with negative emotions and observations leading to more ups/downs in the markets.  I anticipate the general trend remains positive and that markets will grow slowly through the balance of the year.

I hope you find this information useful.  Please pass it on to anyone who you feel would benefit from it.

Please call us if you have any questions or concerns.


August 2018 Calendar of Events   (comments and suggestions always welcome)

August the “What will be your legacy” month.  Are you a good cook, do you love gardening or are you an animal lover.  These are all part of your “legacy”.  Take some time during August to think about and write down things you are passionate about and want to pass on to the next generation.

August 3rd         International Beer Day

August  8th        My birthday!

August 13th       International Left-Handers Day

August 14th       Social Security Act signed in 1935 by Pres. Franklin D Roosevelt

August 26th       National Dog Day – raise awareness of the thousands of dogs that need to be rescued.  We will be celebrating Buddy & Coco, our rescues.


Sources:  Wisdom Tree Investments,  Raymond James and Assoc., Bespoke Investment Group





Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Investing involves risk and you may incur a profit or a loss. Diversification does not ensure a profit or ensure against a loss. There is no assurance that any investment strategy will be successful.  Past performance is no assurance of future results.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus containing this and other information. Read it carefully before you invest or send money.

Information provided should not be construed as legal or tax advice.  You should discuss any tax or legal matter with the appropriate professional.

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